Steve Case Jokes About the Value of AOL

We currently have a Search landscape where four player own the majority of searches. Google, MSN, Yahoo and AOL. To this you could add Ask.com as a valid contender as they have their own search algo and brand and now enough money to at least start the race with the big four.

To me the industry power lies in the 'user ownership' which is exactly why AOL is now in a powerful position. What makes the battle among the top four so intriguing is that if you rank them by current search base and then again by how defendable that user base is, you see the two lists almost exactly flip.
While Google has the most searches they have very few barriers to exit for these users. Compare this to the competition who have (in order of power) portal(yahoo), browser/platform (MSN) and finally ISP(AOL).

Portal = more than just a search engine, a portal also offer email, news, dating etc which encourages homepages status and also locks in users with the email/profiles.

Browser/platform = having control of the PC software means easy integration with the desktop and the ability to constantly override settings. Potentially (but a legal minefield) the controller of the browser/operating system could completely lock certain domains out of the users viewable internet.

ISP = the last point of contact before the home PC and therefore the place that could shape the way the entire internet is viewed.

So I agree with Steve and I think the other big three contenders do too, which is why you see them looking to buy AOL or possibly start their own WiFi ISPs ;)

I agree, Gerbot.

I know quite a few people whose ISP is AOL -- and has been for years. How many people stick with one ISP for half a decade or more?

Whatever AOL is providing to them, they're fairly fiercely loyal and don't want to give it up. Having had a brief peek inside AOL at a friend's home a year ago, I would say that it's not just an ISP; it's a portal -- maybe even a community. With lots of customers.

And I have to say that I've admired AOL's advertising -- the commercials -- for years. While it may not be the ISP of choice for many of us, their commercials make AOL sound like an inviting, exciting, safe community that provides everything and protects against everything. For a newbie (and I'll admit that most AOLers I've met tend to remain newbies, possibly because everything is done for them), it's inviting.

What was Steve smoking when he made that comparison?

We all should be smoking what Steve Jobs is smoking. IMHO...AOL.com / AIM.com Is one of the biggest gold mines on the internet. It just needs to be "mined" a bit.

Dan

I respectfully but vehemently disagree.

Haven't you heard about all the churn stats? AOL -- at least the ISP -- has been a very "losing business" for quite some time.

And if I had to pigeonhole AOL users (as something other than "newbies"), I'd say they're:
- ignorant of other options
- unwilling to deal with real or perceived switching costs

For some AOL'ers I know, for instance, the biggest barrier to switching for them is losing their aol.com address, at least two of whom have (ack!) used that on their resumes and business cards respectively.

On the whole, I'd say a lot of AOL'ers are *quite* well aware of how much AOL stinks (pricewise and otherwise), but the inertia and switching fears hold them hostage.

That, frankly, does NOT seem synonymous with loyalty at all, IMHO ;)

away from being an ISP all together. In 3 years or less they will most likly not even provide intenet access. By coming up with AIM.com and making their IM accessible to everyone on the internet, they are slowing trying to become more like a Yahoo. Once they have a contexual ad system intergrated with search,email and IM they will be doing quite nicely. AOL's ISP is nothing but a big "black hole" and the sooner its gone the better for them in the long run. Dial up internet access will be obsolete in 3-5 years. Everyone will be getting brodband thru fiber optics,cable or over regular phone lines.

BTW: You now can cancel your AOL subscription and keep your AOL email address...they want to keep everyone using their email and IM services. (I just did it about 3 months ago and still have my AOL email address with no charges of any kind.)

Best,
Dan

ThatAdamGuy, are you quite sure you've spoken to the people *I know* whose ISP is AOL? :)

But my point was that it seems (from the people I know, and not extrapolating it to AOL users at large) that whatever AOL offers is compelling enough that many don't want to move. For some, the issue is that usage of AOL doesn't seem to bring with it further knowledge of how the Web and email really work (e.g., an email address is not "someone@"; it's "someone@adomainname.com"). This lack of further information is what causes them to remain -- for want of a better word -- newbies and so moving would be difficult, at best.

Same thing happens with other ISPs, by the way -- those who offer webmail (i.e., user doesn't quite get that he's not actually downloading email because he "sees it on his computer" ... albeit, through a browser, not an email program). Or a portal. They connect to the Web and the browser automatically goes to the ISP home page (or a "mypage" thingie) which means they're kind of dependent on what's offered there.

For them, it's a matter of enough education to afford other choices, if they want them. That is, that they could actually *download* their email to a real email program -- which affords the benefit that, if they ever switch ISPs, they actually *have* their email. Unfortunately, without help, the technology is so confusing to many that it's seemingly insurmountable.

For others (again, with whom *I* have spoken), they simply like AOL. They *like* it. I gotta wonder what's in there that's so likeable.

Yes, you are right that some AOLers are aware of its shortcomings. Or they're tied to it for business reasons (see email issues and -- you're right -- email address issues). For others, see above. Or, the fact that they're not all that interested ("I only use it for email").